that is in skpebs of the current market value of csc. but in order to make this a merger of equals and also a reverse morris trust transaction that will receive the blessing they believe from the irs they allow to be tax-free, theory going to be paying a billion and a half dollar dividend from the newly merged company back to hpe. they're also going to be taking $2.5 million in debt and other liabilities. hence, that's $4 billion and then hpe believes that the combination created through the merger of its enterprise services business with that of cs kc c csc will be worth son-in-law $9 billion. half of that will be owned by hpe share holders. add it all together, they get to an $8.5 billion value. that's something they've been negotiating through the second quarter source working on this deal tell me and this is something they tell us they'll be comfortable with represents the ebitda that comes from the enterprise services. in fact, i'm told it's a multiple that's a bit above where csc currently trades when you do a full turn. a furn tur

so the enterprise services, csc company will be a $26 billion pure play industry leader.nd that's important because i think that part of the business is got to consolidate and always better to be on the front end of consolidation than the back end. >> why do you think that business is going to consolidate? >> ito has changed dramatically. the cloud has become a part of everybody's i.t. estate today. so that business i think is fundamentally changed versus when, you know, hp bought the business back in 2008. >> right. >> so unlocks a lot of value for shareholders. and then that allows us to focus on the stand alone hewlett packard enterprise. as you well know i'm a big believer in focus now. so we're going to have a great software defined data center strategy for the data center as well as the edge, and so we're excited about it. >> it's funny, you've mentioned this a big believer in focus, of course, you've talked oftentimes in interviews about how quickly the world is moving, how much faster. when you got to hp, that was the old hp it was $100 billion in revenues, 300,00

and owned 50/50, 50% by hpe shareholders and 50% by the existing shareholders already of csc. as part of the deal, the combined company will pay a $1.5 billion dividend to hpe, and presumably $2.5 billion worth of liabilities. they're getting the $8.5 billion number, the value that they in the negotiations they've had with csc put on the enterprise services business. once it's jettisoned, hp itself will be a smaller company. on the conference call, meg wittman was talking about that future for that company and what will be left of hewlett-packard enterprise. >> for the remaining hewlett-packard enterprise, this transaction creates significant incremental value. by unlocking a faster growing, higher margin and stronger free cash flow business. hpers will now have $33 billion in annual revenue and will focus on software infrastructure that leverages a world class platform. >> there you have it. that is what hpe will be once this deal is completed. that is quite some time from now. we're talking about the end of march and 2017. given the consolidation many are forecasting in this

services at hp that's being merged into csc. >> well, meg whitman delivered.eliever in the 3d printing of the other hp. >> really? hpq, the symbol for hewlett packard. >> i've seen it. >> no kidding? >> yeah. it's amazing. it's the way people are going to -- you're going to design anything, you're going to do it 3d. by the way, alcoa has a 3d division that is also great. 3d, if you ever get a chance to look at it, it is extraordinary. you're just not going to model anything. hewlett packard's got jnj. hp. they got to change that. they got to make it easier, you know? people get confusing. >> i know. they're going to change the name of csc potentially and hp -- at hp enterprise services to a new name. >> stark industries. >> and charter time warner cable -- >> no, they're just charter. i think they're sticking with charter. >> no, they're going to come -- >> time warner cable. >> they're going to become -- and who's dunder mifflin? >> theranos is dunder mifflin. >> meantime, we are see iing offshore marathon, a lot of discussion what happens at 50. do these guy

the ceo of csc is going to take a lot of cost out of the equation.king for more consolidation among the remaining players? >> fujitsu has a business in this case. i'm not sure if they are out there to sell this stuff or what is happening. ibm has infrastructure outsourcing. you have a $900 billion market for i.t. services, and ibm only has about $50 billion in revenue. it's less than 6% of market share. the rest is scattered through hundreds of vendors out there. alix: because of that, you aren't anticipating regulatory issues? >> it's too small, 6% of the total market. it should not spark any problems. scarlet: nevertheless, watch this space. thank you so much. it is time now for the bloomberg business flash, a look at some of the biggest business stories. ogle's self driving car project is headed for the motor city. the company is opening a self driving car center in detroit. google says having a facility in michigan will help them access top talent. regulators say they freeze the lender from restrictions last year. the u.s. accused wells fargo of

they are now splitting themselves again and merging this play company with csc, which itself was spun from another company. willtt-packard enterprises be spinning up the enterprise focused portion of the business, that is information-technology outsourcing. that will be margin with computer sciences. the deal is valued at $4.5 billion. meg whitman is trying to small size the company she ran. both stocks trading higher, particularly computer sciences. hewlett-packard enterprises has done relatively well since the spinoff was affected last october, rising by about 8% in that time. some of that gain is coming in today's session. speaking of hewlett-packard, hp up 2% todayres are as it reports its earnings after the close of trading. to watch applee holding up relatively well in the face of news that india is going to require the company to source 30% of the smartphones it sells from india itself. essentially building -- essentially a ruling india had already made. the shares are rising with the rest of the technology group. microsoft announcing it will cut as many as 1850 jobs. it will c

hewlett-packard enterprises announced a good quarter, said it was merging its enterprise service segment with the cscright out of the blue. a lightning bolt. let's see. along with cisco hot for networking. applied materials. apple may be doing more units out there. qualcomm talking good. western digital breakaway. microsoft. possible takeover for zylinx. that sure sounds like a legitimate reason for the largest group in the s&p 500 to rally. there's tons of groups moving today. the leader right now is tech, when tech's at the vanguard, the market can give you a powerful and lasting move higher. paul in utah. paul. >> glad you got your voice back. >> i was scratchy. i feel like it was nails on a blackboard. >> much better next week. my question is about alcoa aluminum. creating a new company, will that company then be come an ipo and trade on the nyse. >> they're going to split the companies, it's going to be terrific. aa has come down. it's traded -- the upgrade yesterday was really good. they talked about the idea that it's more core lative. i suggest you read the piece, you buy the stock. john in f

. -- csc.nd now, for 1,000 employs now left in $33 billion in revenues and about 50,000 or so employees. she is talking about the focus, and i asked her why. >> this is the focus that we have wanted, and i did not start out that way, david. when i joined the company, i was not sure this is where we would end up, but technology is changing at lightning speed. it is bet ter to be smaller, an it is better to be leaning into the new technology, and it is better to delever the company, and that what we have done. >> that is what she intends to do, the old shrink to grow, jon. and we have seep nit other business businesses, but she has taken it to heart when you think of what she has done in the last couple of years. >> yes, and meg whitman should have put out the lemonade album, and beyonce did it, but meg whitman on the corporate level has turned it into the science. and sinceage -- agellan, and i will tell you i am not positive, because they are up against the storage and the emc and dell combinat

following and getting a read out on what the panel puts on the table and i look forward to working with cscs and thanks for including me today. [ applause ] truly insightful seat by the senator. if i can ask the panelist to come on up. we can get started. this is an easy panel for me. if i introduce them as i know them, it will probably sound wrong. let me introduce people quickly and we'll have their bios on the web site. eddie, graga senior director of national security counsel. we have two andys they both have the same job, which is a little confusing. andy -- before that he was senior adviser for technology policy secretary commerce and i know he was very effective there hearing from other people, including the secretary and he, of course, was professional staff member at snci starting all of this. after him, we have kiersten duncan. she's pitch hitting for some reason the other speaker we had from the committee had to go to a meeting on tsa. i don't know might have happened today that will call for secretary johnson to have an emergency meeting, in that case, we're grateful for you bein

hp is up and computers sciences, csc, up about 20% at last check. own about 50% of this new company. so there you go. back to you. david: good for hewlett-packard. congratulations. melissa? >> the ultimate clinton insider now under investigation by the fbi. virginia governor terry mcauliffe chaired hillary clinton's campaign in 2008 and bill clinton's re-election in '96. now he is the focus of a justice department investigation for questionable campaign donations. fox news's doug mckelway has the details. doug, you have been digging up great stuff on this all day. what do you have for us now? reporter: well, melissa, fox news learned that virginia democratic governor terry mcauliffe is target of justice department investigation into campaign contributions t centers around a chinese billionaire businessman, wen wang, who donated 120,000 to his 2014 gubernatorial campaign and two million dollars to the clinton foundation. mcauliffe, a long time clinton ally once sat on board of clinton global initiative. he was shocked to learn of the allegation and t

looking back, sometimes we forget the huge importance of the csc in getting us through the cold war and out the other side in as good a shape as we are in. turning back to europe and ukraine, instability persists. as of february, the minsk cease-fire has failed to halt the conflict that has killed more than 9000 people. it is unclear whether europe will be able to deliver refugee rights. among the challenges are also threats to europe's core, the mounting forces of disintegration across europe's centrifugal forces, risk unraveling the peace and stability achieved through years of transatlantic leadership for security. realizing these new dangers, the council has ramped up its own initiative, because we think the reminder is necessary now and in washington, and across the , of the imprints of the transatlantic relationship to the security of a global future. leaders have become increasingly reluctant to work together in restoring a vision for europe or a transatlantic vision. a chief example is the united kingdom's june 23 vote to stay in or leave the european union. we released last wee

from there it's going to grow pretty dramatically, csc, and the market responded yesterday with an incredibleove up. hp shares had hit a high of 18 1/2 but are done from there. >> a lot of people were shorting computer science and suddenly they become excensure, which is incredible. >> i have to tell you, every kiss does not begin with kay today. >> no? >> a lot of people are questioning whether this is a jewelry company where you buy credit or is this a credit company where you buy jewelry? it's a battle ground. >> biotech had shown a bit of life lately. >> it's all because of you and sanofi. >> they are well, well off their highs. >> then you have an important drug that glaxo smith klein doesn't want to do a phase three. you've got a lot of different currents. but the main thing people want to hear is that gilead is going to buy something. >> but their history has been they'll buy a big dollar thing but not a company that has a lot of employees. they don't like that. it was 90 employees when they bought sivaldi. they like to go down that road. >> david, the thing that concerns me. >> they l

barclay's upgrading csc. they like the synergy opportunities. that is fancy talk for cost cuts.houldo outwaeigh the top line growth. the target boosted to $54. a lot of upside. the analyst is applying a 10% discount in the price target. melissa, for the probability or possibility that the deal will not close. >> stunning increase. you get a chance, check out hpe shares. those shares are doing really well on this news and also the better than expected earnings last night. next up, biogen, it's raising prices for three multiple sclerosis drugs. according to cowen, there could be upside to 2016 guidance. the cfo did not include the hikes in the guidance that was given in january. despite election year politics, they see u.s. pricing in the marketplace as flexible, prices can go up. and that would be a support pillar of biogen's franchises. >> maybe they feel they need to do something. stock is down 30% over past 12 months. >> along with biotech. >> western digital, another barclay's call. the analyst upping western digital to an overweight from equal weight. he thinks the stock has

it will be better off if we combine it with csc. let them find some synergy.let me as head of each pe focus on -- hpe focus on higher margin. she has got storage, servers, and she's got networking. these are the kind of things that are building the data centers that are moving this dated around the internet. vonnie: but we can just get run-of-the-mill white box data centers? tom: there is no question she will face pressure. facebook and google are building their own servers. they are not going to -- i've got to buy this from hp. you are seeing a much more streamlined business and she will be able to focus on that much more and our competition much more. day it's aack in the good strategy, scale is important. not so much anymore. she says, no thanks. we expected that. what is next for the company now? tom: another company taking another retrenching in the areas of smartphones. what is next for them? he's come in and made a major transformation for the company. he is changing the culture, making it more open, getting successes in areas like the cloud. success in

deutsch, this has become, this is not just the i csc issue, their press reports, one of one in fact this week of a serial plaintiff filing 1000 lawsuits. the response to mr. cohen's reference to lawsuits in california, california has actually passed two pieces of legislation to actually curb the abuse of these lawyers even what the damages provision that he thinks will actually help. there are abuses going on so california has passed legislation to try to limit the abuses that are occurring there. >> mr. buckley, isn't there a difference between a business owner who refuses to include a required number of handicap spaces or who refuses to make the restrooms accessible and a business owner who runs a business, who followed all of the technical assistance as best as he or she could and the grab bar is 2 inches too high. or the paper towel holder is a couple of inches off, or the line on the handicap parking spaces there is john slightly crooked. there's a difference between them, isn't there? shouldn't? shouldn't we incentivize, don't want the people in the bad actors to actually have to d

brilliant deal with csc. you have to allow capital to go to the highest form of return.ive destruction. >> you liked what you heard from meg whitman earlier this week when dave faber interviewed here. do you own shares of hpe? >> we own some. the reason is there's 1.7 billion shares. stock is around 17. and you are getting $3 or $4 of cse and cash. they have a great ebitda. she'll do something. we're trying to figure out where she goes next. we own a little bit. we don't. since she took over the company -- started around 19. down 12. we haven't bought any recently. that's not a big position for us. our big positions are clearly, you know, companies that we make. the new positions we're buying are defense spending. >> why is that? >> the u.s. is underspent significantly in the last eight years. you have the south china sea, russia in that part of the world. so we're going to have to put money back into defense spending. harris corp. text tron. the lock heeds of the world. that's an area that at the margin we're buying every day and adding to positions. whoever is presiden